Time to start thinking about taxes
While children are allowed the luxury of dreaming of sugar plums at this time of the year, the prudent pilot thinks of the adult version of coal in the stocking: taxes.
"Year's end means tax time," reminds Rodney Martz, AOPA senior aviation technical specialist. "AOPA offers a great overview of taxes for the aviator. It'll help you prepare for the tough work to come. We're not accountants here, but we can talk about the basics and help you get your bearings."
AOPA receives a lot of questions from members regarding taxes and tax laws. AOPA's Pilots' Guide to Taxes discusses income, sales, use, and personal property taxes. It is a comprehensive booklet written in easy-to-understand language. Two areas that the AOPA booklet explores are income tax deductions that can sometimes cause the IRS to take a second look at you, and the nature of sales and use taxes and how they are collected.
This is a good time to start looking into reviewing or rereading information on the deductibility of aircraft expenses — everything from leasing or renting to instruction or flight reviews. AOPA offers a separate booklet on aircraft leasing and taxes, An Aircraft Owner's Guide to Leasing.
A basic tax question posed by AOPA members who use aircraft for business purposes is whether their aircraft expenses are tax deductible. The types of expenses that members commonly look to deduct are the basic costs associated with aircraft operation, including maintenance, fuel, tiedown or hangar fees, landing fees, insurance, and depreciation.
"Even if you don't own an aircraft, many pilots have found that you can look at refunds on fuel taxes," says Martz. "About half of the states in this country have the option and while there are caveats, it's worth knowing about and checking into it further.
"One area that the AOPA Pilot Information Center receives more and more calls concerns charity flying and taxes," adds Martz. "We're glad to see pilots helping the nonflying community, and you should be able to take some deductions if you can. We can give you details on how to do just that."
If, after reviewing the appropriate law, cases, and rulings, you decide that you have a legitimate claim to a deduction, your next step is reporting the deduction on the appropriate IRS forms.
It is important to keep in mind that AOPA can provide you with general information regarding tax issues that could affect you as an aircraft owner and pilot. "We urge you to consult with a tax professional regarding your specific tax questions. We can assist in helping you find resources to help you and your tax professional," says Martz.
As an AOPA member, you have access to the best resources anywhere for information and answers for pilots. AOPA provides information for its members through a vast array of communications technologies. You can reach experts in all fields of aviation via AOPA Online ( www.aopa.org/members/), the AOPA Pilot Information Center (800/USA-AOPA), and e-mail ( [email protected]). Aviation technical specialists respond promptly to member requests and AOPA Online provides members with access to information and resources 24 hours a day, seven days a week. The toll-free AOPA Pilot Information Center gives direct access to specialists in every area of aviation. The center is available to members from 8:30 a.m. to 6 p.m. Eastern time, Monday through Friday.
AOPA Web resources
These subject reports provide answers to frequently asked questions. The AOPA Aviation Services department (800/872-2672) answers more than 100,000 calls a year from members needing assistance with a variety of aviation-related issues.
www.aopa.org/members/files/topics/
AOPA's Pilots' Guide to Taxes is intended to help with the basics of income, sales, use, and property taxes on aircraft purchases.
www.aopa.org/members/files/guides/income.html
Charity flying and taxes are discussed, including specific examples of charity flights and contacts for groups such as Air Care Alliance.
www.aopa.org/members/files/topics/charity_taxes.html
A state-by-state listing of aviation fuel exemption or refund availability.
www.aopa.org/members/files/topics/fuel.html
AOPA's An Aircraft Owners Guide to Aircraft Leasing includes information on tax considerations when leasing aircraft.
www.aopa.org/members/files/guides/aclease.html
From AOPA Pilot magazine, information from legal counsel John Yodice on charitable flights and tax deductions.
www.aopa.org/members/files/pilot/1996/pc9603.html
Related Articles
